Disney Recoups A Quarter Of $4 Billion Star Wars Purchase Price

Disney has felt the force of Star Wars as it has made back at least a quarter of the $4 billion that it paid in 2012 to buy Lucasfilm, the owner of the sci-fi series, according to an analysis of financial statements.

Disney bought Lucasfilm from its founder George Lucas and has gone on to make four Star Wars films. There have been two sequels to the original trilogy, which launched in 1977, and two spinoff movies.

The most recent was last month's Solo: A Star Wars Story which tells the origin of iconic hero Han Solo who was played by Harrison Ford in the original movies as well as 2015 sequel The Force Awakens. New star Alden Ehrenreich takes on the role in the latest movie and is joined by A-listers Donald Glover and Woody Harrelson.

New star Alden Ehrenreich has taken on the role of iconic adventurer Han Solo2018 Lucasfilm Ltd

Solo was originally directed by Philip Lord and Christopher Miller, the duo behind 2014 hit The Lego Movie. However they were replaced in June last year with Oscar-winning director Ron Howard who re-shot scenes that had already been filmed.

According to the financial statements for the production company behind the movie, “the estimated final cost was forecast in excess of the budget, however the film continued to be funded by its financiers...LFL Production LLC, a wholly owned subsidiary of the ultimate parent company, The Walt Disney Company."

Movie budgets are usually kept a closely guarded secret as the studios tend to absorb the cost of individual pictures as part of their overall expenses so they don’t have to reveal how much they spent on each one. However, Solo was made in Britain where the costs of movies are consolidated in single companies that have to file publicly available financial statements.

The companies usually have code names so that they don’t raise attention when filing for permits to film off-site. The one behind Solo is named Stannum 50 Labs which refers to the Latin name for tin. It is thought that this is a nod to Han Solo’s armoured arch nemesis Boba Fett who is tipped to star in his own spinoff film.

As British newspaper the London Evening Standard recently revealed, in the two years and three months to 11 November 2017 the total cost of making Solo came to $275 million (£203.4 million). This total is shown on the financial statements below and is expected to rise as it doesn’t include post-production.

The financial statements for Solo reveal that $275 million (£203.4 million) was spent on making the movieCompanies House

One of the biggest costs is paying staff and the financial statements for Solo show that $34.1 million (£25.2 million) was spent on this. It doesn’t even include freelancers and self-employed workers, who make up the vast majority of personnel on a movie.

Other key costs are equipment hire, travel and spending on visual effects companies like Disney’s own Industrial Light & Magic which has an office in London. It opened in July 2013 to capitalise on the surge in interest in filming in Britain.

Figures released by the British Film Institute (BFI) show that $2.6 billion (£1.9 billion) was spent on the production of movies in Britain last year. It was a 23% increase on 2016 and the highest since the BFI began collecting records more than 20 years ago. A total of $2.3 billion (£1.7 billion) came from foreign firms including next month's Mission Impossible 6 and the latest Harry Potter movie, Fantastic Beasts and Where to Find Them 2.

As we have reported, Disney’s Star Wars movies have all been shot in Britain and, according to their latest financial statements, a total of $1.3 billion (£1 billion) has been spent on making them.

This cost is far outweighed by the ticket sales of Disney's Star Wars movies. According to industry analyst Box Office Mojo they have grossed $4.7 billion worldwide including the $264.2 million made by Solo since its release on 24 May.

Studios typically get around half of the takings so Disney has already recouped at least a quarter of the purchase price of Lucasfilm from the movie profits alone. That’s without even including revenue from the home release or merchandise sales though it is also understood to exclude marketing and publicity costs which are expensed by Disney itself.

There's also another hero waiting in the wings as Lucasfilm came with the rights to whip-cracking adventurer Indiana Jones. He too is played by Ford who will return to the role in 2020 when the fifth instalment in the series is released 39 years after the première of the original. By then a third Star Wars sequel will have cast a spell on the box office putting Disney closer to a return on its investment in Lucasfilm.

I write about the business of Formula One auto racing as well as the theme park industry and have been doing this since 2002. My colleague Caroline Reid and I are the only journalists worldwide who specialise in covering the business of F1 and we write for more outlets than ...